Dollar index hits century

Dollar index is of value of US dollar relative to a basket of currencies such as Euro, Yen, Pound, Canadian dollar, Swedish Krona and Swiss franc.

• Today dollar index sniffed at the 100 level after its fall from the level on heavy profit booking at the level. The latest move by the index has been quite extreme and current price pattern show some signs of exhaustion among bulls.

• The index is currently trading at 99.30, down 0.40% for the day.

• In last 10 days, the index rose more than 6% to reach level of 100 today. The move was accelerated by heavy selling in Euro and Krona.

• The index has returned close to 25% in last one year. It rose from 68 in 2011.

Expectations -

• Cycle analysis suggests that dollar strengthen was overdue and further upside move cannot be ruled out.
  
  
• However, in the near term traders should brace for some correction or consolidation as FOMC policy meeting is looming next week.
  
  
• The index still remains below its highs of 2000 at 120 and 164.7 during 1985.